Technically Cotton market is under long liquidation as market has witnessed drop in open interest by 0.05% to settled at 2160 while prices down 560 rupees.
Now MCX Cotton is getting support at 30180 and below same could see a test of 29900 levels, and resistance is now likely to be seen at 30820, a move above could see prices testing 31180.
Cotton yesterday settled down by 1.8% at 30470 on profit booking amid prospects of rising production. Higher output from Australia, Brazil, and the United States should offset the fall projected for China and India, according to the International Cotton Advisory Committee (ICAC).
Still, production would remain below the level observed before the pandemic and demand is seen strong due to the recovery in the textile industry, specially from top user China.
China ramped up imports from the US to make goods and ship them back after last year President Trump banned cotton imports from the Xinjiang Production and Construction Corps saying it uses the forced labor of detained Uighur Muslims.
Meanwhile, heavy rains are threatening crops in major US growing regions including Texas and the Mississippi Delta, while a pest called pink bollworm is rapidly spreading across fields.
Unseasonal rains in growing areas are proving to be a blessing in disguise as they might help cotton farmers go in for third and fourth picking of their crop this year.
India’s cotton production to increase in view of this as higher prices besides a favourable water storage situation will prompt farmers to extend the picking period beyond November-December. In spot market, Cotton gained by 80 Rupees to end at 28560 Rupees.
Trading Ideas:
–Cotton trading range for the day is 29900-31180.
–Cotton prices dropped on profit booking amid prospects of rising production.
–Higher output from Australia, Brazil, and the United States should offset the fall projected for China and India.
–Still, production would remain below the level observed before the pandemic and demand is seen strong due to the recovery in the textile industry.
–In spot market, Cotton gained by 80 Rupees to end at 28560 Rupees.
Courtesy: Kedia Commodities
Source: Comodity Online
